We are looking to raise Rs 15-20 crore via IPO listing on NSE: Hiren Shah, Vertoz

Key highlights:

• Vertoz Advertising plans to go the IPO way to raise Rs 15-20 crore
• The ad agency will do so by diluting about 25-26% stake of the promoters
• Vertoz is expecting a turnover of over Rs 30 crore at the end of this year

Programmatic advertising agency Vertoz Advertising plans to go the IPO (initial public offering) way to raise Rs 15-20 crore. The company is going to apply to NSE for approval to list its shares.

The ad agency will do so by diluting about 25-26% stake of the promoters in the company. The company is already in the filing process of the IPO and expects the listing to be completed by the second week of October, before Diwali.

Vertoz will be the first programmatic ad agency in the country to go public. Most of the advertising agencies in the country are not listed. The closest that came was ad tech company InMobi that was planning to go for an IPO in 2016.

Programmatic advertising is an automated process in digital media buying that allows brands and ad agencies to target a specific group of consumers at the right time and place and push them towards making a purchase decision.

The Zeebiz team spoke to Hiren Shah, Founder and Chairman of Vertoz on the company going the IPO way.

What is the revenue of the company for the previous year and this year?

Last we had done a Rs 20 crore turnover, with a 30% profit margin. In this year, in the first quarter we have almost done around Rs 9.8 crore turnover. We have been growing at 100% and expect to do so this year too. We are expecting a turnover of Rs 30 crore plus at the end of this year. We are banking a lot on our international business but India a few years down the line will be a big revenue earner for us as well.

Do you have any plans to get the company listed on BSE too?

Not right now. We currently do not have any plans to get listed on BSE. We feel that NSE has more credibility. Eventually we will look at listing on BSE too. Once the volumes increase and the business increases we will list on BSE. There are costs too to get listed on BSE too. So once the NSE listing gets fine tuned and get good experience then we will look at BSE.

Why is Vertoz going for the IPO route as most ad agencies in India go for private investment or the acquisition route?

We believe we can create a value chain for the investors and there is a huge opportunity of not getting into a huge management and grow the business in multifold using the IPO route. It is the distribution of wealth and we are trying to have more people with us to grow together. We were a bootstrapped start-up started some time back and we were able to with the internal accruals itself our expansion. The objective of this IPO is to get a good visibility for the brand. When you are a listed firm you get a good platform to talk to stake holders.

What are you planning to do with the Rs 15-20 crore that you look to raise?

We are working towards planning out business channels and looking at attracting more advertisers and publishers on board. We are also looking at coming out with innovative products. For instance, we are coming out with a product called influencer marketing where we are trying to help Facebook users to make money by our platform. If a person has over 2,000 followers and if they enroll for our programmatic platform and if that person shares a particular ad on our platform you can get money from people visiting that shared link. These are the innovative things we are coming up with and we are looking to put the funding on that side.

Are you looking at attracting retail investors too or just institutional investors?

We are trying to get information to attract retail investors, we are not looking at only institutional investors. We believe this is a group story where our retail investors can look at this company to invest and get good returns. We agree that retail investors may not understand programmatic advertising is and for them it will be different as there is no comparison to other companies. But the reason we are going to the SME segment where launch price is Rs 1,29,200, which a retail investor may not be able to give. But someone who has digital investment knowledge is going to come to the board. They are going to buy this kind of share from us. So we believe that an investor who has a little bit of knowledge is going to ask the question and come to us and talk to us.

What is the targeted share price that Vertoz is looking at being listed on NSE at?

Currently, we have a tentative price of Rs 108 per share at this moment by raising Rs 17-18 crore. But still it is in the process, so once we get the final numbers then we will get to know exactly at what price it will be listed.